The OIG published a notice today announcing that it is extending the public comment period on its July 11, 2014 notice soliciting recommendations for revising OIG's non-binding criteria for implementing its permissive exclusion authority under Section 1128(b)(7) of the Social Security Act. The OIG notes that due to a technical problem, the public may have been unable to submit comments during the original comment period. The new comment deadline is December 29, 2014.
CMS is expected to publish several major final Medicare payment rules for 2015 in the coming days. The agency has already submitted to the White House Office of Management and Budget (OMB) for regulatory clearance the final 2015 rules updating Medicare payments for outpatient hospitals, ambulatory surgical centers, home health agencies, and end-stage renal disease facilities, along with reimbursement policy updates impacting suppliers of durable medical equipment, prosthetics, orthotics, and supplies. The final Medicare physician fee schedule rule is not yet at OMB, but it should be following shortly. While the text of the regulations are not yet available, we expect that the rules will be put on display at the Federal Register in the near future. We will be providing summaries of the final rules in future updates.
On October 27, 2014, CMS published a notice announcing that it is establishing an Advisory Panel on Clinical Diagnostic Laboratory Tests, as authorized by the Protecting Access to Medicare Act of 2014 (PAMA). The Panel will provide recommendations to CMS on the following issues:
- Calculation of weighted median for laboratory services using private payor rates.
- Phase-in of reductions from private payor rate implementation.
- Application of market rates.
- Evaluation and designation of tests as advanced diagnostic laboratory tests.
- Whether to use crosswalking or gapfilling to determine payment for a specific new test.
- The factors used in determining coverage or payment processes for new clinical diagnostic laboratory tests.
CMS is requesting nominations for individuals to serve on the panel, which will consist of up to 15 individuals with expertise in issues related to clinical diagnostic laboratory tests, which may include representatives of clinical laboratories, molecular pathologists, clinical laboratory researchers, and experts in clinical laboratory science or the economics of clinical laboratory services. The deadline for submitting nominations is on November 26, 2014.
On October 23, 2014, CMS published the proposed methodology for determining federal payment amounts for states that elect to use the Basic Health Program to offer health benefits to low-income individuals otherwise eligible to purchase coverage through an Affordable Insurance Exchange/Marketplace for 2016. CMS proposes to use the same methodology in 2016 as was established in the final 2015 payment notice, with updated values. Comments will be accepted through November 24, 2014.
CMS has released the Medicare Part A inpatient hospital deductible and hospital and extended care services coinsurance amounts for 2015. Specifically, the 2015 Part A deductible for hospital inpatient admissions for the first 60 days of care will be $1,260, followed by $315 per day for days 61-90 and $630 per day for stays beyond the 90th day in a benefit period. The daily skilled nursing facility coinsurance for days 21 through 100 in a benefit period will be $157.50 in 2015. CMS also published the 2015 Medicare Part A premium amounts for the uninsured aged and disabled individuals who have exhausted other entitlement. Finally, CMS has announced that Medicare Part B premiums and deductibles will be unchanged in 2015, for the second consecutive year. Specifically, the 2015 premium varies by income from $104.90 to $335.70 per month, and the Part B deductible is $147.00 for all Part B beneficiaries.
On October 24, 2014, the HHS Office for Human Research Protections published a notice announcing that it is seeking comments on draft guidance for the research community entitled “Guidance on Disclosing Reasonably Foreseeable Risks in Research Evaluating Standards of Care.” The guidance addresses risks to subjects that are presented by research evaluating risks associated with standards of care, and which of these risks are reasonably foreseeable and should be disclosed to prospective research subjects as part of their informed consent. Comments on the guidance will be accepted until December 23, 2014.
The Office of the National Coordinator for Health Information Technology (ONC) is launching the “Market R&D Pilot Challenge,” which will bring together health care organizations and innovative companies to test new health information technology products through pilot funding awards and facilitated matchmaking. Pilot proposals could be awarded in three domains: clinical environments (e.g., hospitals, ambulatory care, surgical centers); public health and community environments (e.g., public health departments, community health workers, mobile medical trucks, school- and jail-based clinics); and consumer health (e.g., self-insured employers, pharmacies, laboratories). Among other things, the program is intended to encourage early collaboration between entrepreneurs, medical and public health personnel, patients, and the research community in efforts to link health IT innovation to care delivery innovation. Up to 6 winning proposals will each receive a $50,000 award.
Reed Smith Client Alert: Analysis of HHS OIG Proposed Rule to Amend the Anti-Kickback Safe Harbors, CMP Rules on Beneficiary Inducements & Gainsharing Regulations
The Office of Inspector General (OIG) of the Department of Health and Human Services (HHS) has published a major proposed rule that would amend the safe harbors to the Anti-Kickback Statute (AKS) and the Civil Monetary Penalty rules to protect certain payment practices and business arrangements from criminal prosecution or civil sanctions under the AKS. Reed Smith has prepared a Client Alert analyzing the proposed rule, highlighting areas where the OIG is seeking public comment. Overall, the OIG appears to recognize that new health care delivery mechanisms demand a more flexible approach to fraud and abuse enforcement than has been the case in the past, as discussed in our analysis.
The Client Alert is available here.
OIG and CMS Extend Fraud/Abuse Waivers for Medicare Shared Savings Program/ACOs; Invite Feedback on Waiver Policy
Today the OIG and CMS published a joint notice continuing the effectiveness of fraud and abuse law waivers granted in 2011 in connection with the Medicare Shared Savings Program, which is intended to encourage physicians, hospitals, and certain other types of providers and suppliers to form accountable care organizations (ACOs).
By way of background, in a November 2, 2011 joint OIG-CMS interim final rule with comment period, the agencies established waivers of the application of the federal physician self-referral law, the federal anti-kickback statute, and certain civil monetary penalties law provisions to specified arrangements involving ACOs participating in the Shared Savings Program (the Waiver IFC). In 2011 Reed Smith prepared an in-depth analysis of the Medicare Shared Savings Program, including an analysis of the Waiver IFC. Because of a general 3-year deadline for publishing Medicare final rules after the publication of a proposed or interim final rule, the agencies are extending the timeline for publication of a final rule concerning Shared Savings Program waivers to avoid “creating legal uncertainty for ACOs participating in the Shared Savings Program and potentially disrupting ongoing business plans or operations of some ACOs.” The notice also states that CMS is developing a proposed rule to make certain modifications to the Shared Savings Program regulations; in order to ensure that the final waiver regulations align with the Shared Savings Program rules, the agencies believe “the prudent course of action at this time is to extend the effectiveness of the Waiver IFC.” Thus the Waiver IFC will remain in effect through November 2, 2015, unless a final waiver rule becomes effective on an earlier date.
In the notice, the agencies also suggest that they would benefit from additional stakeholder input to inform their understanding of:
- how and to what extent ACOs are using the waivers;
- whether the existing waivers serve the needs of ACOs and the Medicare program;
- whether the waivers adequately protect the Medicare program and beneficiaries from the types of harms associated with referral payments or payments to reduce or limit services; and
- whether there are new or changed considerations that should inform the development of additional notice and comment rulemaking.
No deadline is specified for providing feedback on these considerations.
On October 9, 2014, CMS is publishing a proposed rule that would extensively revise the conditions of participation (CoPs) that home health agencies (HHAs) must meet to participate in the Medicare and Medicaid programs. The rule is intended to provide HHAs with enhanced flexibility while focusing provider efforts on the services delivered to the patient, the quality of care furnished by the HHA, and quality assessment and performance improvement efforts. According to CMS, the proposed CoPs “reflect a fundamental change in our regulatory approach -- a change that to a large extent establishes a shared commitment between CMS and HHA providers to achieve improvements in the quality of care furnished to HHA patients.” CMS expects its patient-centered, outcome-oriented approach to enhance the working relationship between state survey agencies and HHAs, and provide a basis for improved performance that will help ensure that quality care is provided to all patients.
More specifically, CMS proposes to establish the following four CoPs (in addition to retaining current requirements related to comprehensive assessment of patients):
- “Patient rights” would emphasize the HHA's responsibility to respect and promote the rights of each home health patient.
- “Care planning, coordination of services, and quality of care” would incorporate the interdisciplinary team approach to provide home health services focusing on the care planning, coordination of services, and quality of care processes.
- “Quality assessment and performance improvement” (QAPI) would require each HHA to conduct ongoing quality assessment, incorporate data-driven goals, and maintain an evidence-based performance improvement program of its own design to affect continuing improvement in the quality of patient care.
- “Infection prevention and control” would require HHAs to follow accepted standards of practice to prevent and control the transmission of infectious diseases and to educate staff, patients, and family members or other caregivers on these accepted standards.
CMS proposes to remove many process details from the current CoPs where they do not achieve the goal of ensuring desired outcomes. CMS is not proposing to incorporate by reference any specific clinical practice guidelines or professional standards of practice; HHAs would be responsible for identifying their own performance problems through their QAPI programs, addressing them, and continuously striving to improve the quality of care, patient outcomes and satisfaction, and efficiency/economy. The proposed CoPs also are designed to enable surveyors to look at outcomes of care and “how effectively the provider was pursuing a continuous quality improvement agenda.” CMS will accept comments for 60 days after publication (December 8, 2014).
CMS has published corrections to its August 22, 2014 final update to the Medicare Hospital Inpatient Prospective Payment System (IPPS) and the Long-Term Care Hospital Prospective Payment System for FY 2015. Among other things, CMS made technical errors in its calculation of the operating and capital IPPS budget neutrality factors, outlier threshold, operating standardized amounts, capital federal rates, and impacts. CMS also made errors in determining the FY 2015 readmissions payment adjustment factors; CMS has revised the estimated savings under the Hospital Readmissions Reduction Program to $428 million, from $424 million in the final rule.
CMS has published a notice announcing the annual adjustment in the amount in controversy (AIC) threshold amounts for Administrative Law Judge (ALJ) hearings and judicial review under the Medicare appeals process. Specifically, the calendar year 2015 AIC threshold amounts are $150 for ALJ hearings and $1,460 for judicial review. These amounts are effective for requests for ALJ hearings and judicial review filed on or after January 1, 2015.
The Office of the National Coordinator for Health Information Technology (ONC) published a final rule on September 11, 2014 that is intended to introduce regulatory flexibilities with regard to certification to the 2014 Edition Electronic Health Records (EHR) Certification Criteria. The rule also codifies certain revisions to the ONC Health Information Technology (HIT) Certification Program for certification to the 2014 Edition and future editions, and it makes administrative updates to associated regulations. ONC specifies that EHR technology developers do not have to update and recertify their products to the revised 2014 Edition Release (also referred to as the “2014 Edition Release 2”), nor do eligible providers have to upgrade to EHR technology certified to the 2014 Edition Release 2, although ONC encourages such stakeholders “to consider whether the 2014 Edition Release 2 offers any opportunities that they might want to pursue.”
OIG Releases Proposed Revisions to Anti-Kickback Safe Harbors, CMP Rules on Beneficiary Inducements & Gainsharing
The OIG has just released a major proposed rule to amend the safe harbors to the Anti-Kickback Statute (AKS) and the Civil Monetary Penalty (CMP) rule to protect certain payment practices and business arrangements from criminal prosecution or civil sanctions under the anti-kickback statute. In particular, with regard to the AKS, the OIG proposes:
- a technical correction to the existing safe harbor for referral services;
- protection for certain cost-sharing waivers, including: pharmacy waivers of cost-sharing for financially needy Medicare Part D beneficiaries, and waivers of cost-sharing for emergency ambulance services furnished by state- or municipality-owned ambulance services;
- protection for certain remuneration between Medicare Advantage organizations and federally qualified health centers;
- protection for discounts by manufacturers on drugs furnished to beneficiaries under the Medicare Coverage Gap Discount Program; and
- protection for free or discounted local transportation services that meet specified criteria.
The OIG also proposes to amend the definition of “remuneration” in the CMP regulations at 42 CFR 1003 by adding certain statutory exceptions for:
- copayment reductions for certain hospital outpatient department services;
- certain remuneration that poses a low risk of harm and promotes access to care;
- coupons, rebates, or other retailer reward programs that meet specified requirements;
- certain remuneration to financially needy individuals; and
- copayment waivers for the first fill of generic drugs.
The OIG also proposes to codify the gainsharing CMP rule set forth in section 1128A(b) of the Social Security Act. The official version will be published tomorrow; Reed Smith is preparing an analysis of this proposed rule.
In its September 19, 2014 Special Advisory Bulletin (SAB), the Office of Inspector General (OIG) of the Department of Health & Human Services (HHS) noted the potential risks to federal health care programs presented by pharmaceutical manufacturers’ coupon programs designed to reduce or eliminate patient copayment requirements for brand-name drugs, and emphasized that coupon program sponsors and pharmacies are at risk of sanctions if they fail to take appropriate steps to carve out federal health care program beneficiaries from using the coupons. The OIG points out these coupon programs – which may take different forms, such as print coupons, electronic coupons, debit cards, and direct reimbursements – are remuneration offered to consumers to induce the purchase of specific items, and therefore implicate the criminal federal anti-kickback statute, 42 U.S.C § 1320a-7b(b). Where remuneration is knowingly and willfully paid with the intent to induce or reward referrals of items or services payable by a federal health care program, the anti-kickback statute is violated. The OIG goes on to observe that a claim that includes items or services resulting from a kickback violation would also constitute a false or fraudulent claim under the False Claims Act, 31 U.S.C. § 3729, and grounds for civil money penalties for beneficiary inducement if offer or acceptance of copayment coupons may induce a beneficiary to use a particular practitioner or pharmacy, 42 U.S.C § 1320a-7a(a)(5). While the SAB’s focus is on manufacturer coupon practices, in a footnote, the OIG states that pharmacies accepting coupons for Part D copayments may also be subject to these sanctions.
Notwithstanding the potential benefits of coupon programs to provide access to brand-name drugs and adherence to drug regimens, the OIG claims that such coupon programs may interfere with federal health care program cost-sharing requirements to promote prudent prescribing and purchasing choices by physicians and patients based on the “true costs” of drug and price competition in the market. As a result, the OIG writes, “[w]hile copayment coupons provide an immediate financial benefit to beneficiaries, they ultimately can harm both Federal health care programs and their beneficiaries.”
In the SAB, the OIG acknowledges that the pharmaceutical industry is aware of the potential anti-kickback concerns and generally has implemented a variety of controls to exclude federal health care program beneficiaries from these programs. The OIG’s concern seems to be that these controls don’t go far enough or don’t always work. In other words, the OIG sees the glass as “half empty.” The OIG does not seem to acknowledge that the glass may actually be half-full – i.e., the industry's attempt to have some controls (even if imperfect) evidences manufacturers’ intent to comply with the statute, making it difficult to show criminal liability.
In fact, the OIG’s report, “Manufacturer Safeguards May Not Prevent Copayment Coupon Use for Part D Drugs” (OEI-05-12-00540) http://go.usa.gov/pdYQ, issued concurrently with the SAB, describes in detail mechanisms used by various manufacturers, most notably through claims processing and “switches,” to prevent use of the coupons for drugs paid for by Medicare Part D. The report identifies the principal shortcomings identified with these mechanisms as stemming from the fact that CMS does not permit manufacturers to submit Part D enrollment verification requests (“E1 transactions”) to the Part D Transaction Facilitator because of privacy concerns, so that manufacturers must use various “proxies” to attempt to determine whether the individual using the coupon is enrolled in a Part D plan. The report finds that these proxies, which may include elements as inexact as beneficiary age, may not be accurate enough to guarantee exclusion of Part D claims. Consequently, the OIG appears to be asserting that manufacturers may have liability for having imperfect controls, even though the current claims-processing system does not make a perfect solution available to them. The report did not identify any specific Part D claims for which coupons had in fact been used contrary to coupon terms and conditions.
The OIG recommends that CMS cooperate with industry stakeholders to improve the reliability of pharmacy claims edits, and make coupons transparent. CMS concurred with the recommendation.
OMB Clears OIG Proposed Rule on Anti-Kickback Safe Harbors, CMPs for Beneficiary Inducements & Gainsharing
The Office of Management and Budget (OMB) has cleared an HHS Office of Inspector General (OIG) proposed rule that would expand the OIG’s Medicare and state health care program fraud and abuse authorities. Specifically, on September 4, 2014, the OMB gave final regulatory clearance to an OIG proposed rule that would add new anti-kickback safe harbors to reflect statutory changes, codify the ACA’s definition of "remuneration," and add a gainsharing civil monetary penalty (CMP) regulation. The proposed rule should be published in the Federal Register in the near future.
The Centers for Medicare & Medicaid Services (CMS) and the Office of the National Coordinator for Health Information Technology (ONC) have issued a final rule that gives providers additional options in how they use certified electronic health record (EHR) technology (CEHRT) to meet meaningful use requirements for the 2014 EHR Incentive Program reporting period. Under the final rule, eligible providers can use the 2011 Edition CEHRT or a combination of 2011 and 2014 Edition CEHRT for an EHR reporting period in 2014. All eligible professionals, eligible hospitals, and critical access hospitals will be required to use the 2014 Edition CEHRT in 2015. Among other things, the final rule also extends meaningful use Stage 2 through 2016 for certain providers (Stage 2 meaningful use criteria focus on exchange of clinically relevant information between providers and promote patients’ secure online access to their health information). The rule also provides that Stage 3 will begin in 2017 for providers who first became meaningful EHR users in 2011 or 2012 (under Stage 3, meaningful use will include demonstrating improvement in quality of health care).
On September 5, 2014, CMS is publishing a final rule that specifies additional options for annual eligibility redeterminations and renewal and re-enrollment notice requirements for qualified health plans (QHP) offered through the ACA insurance Exchange/Marketplace, beginning with annual redeterminations for coverage for plan year 2015. The rule provides an auto-enrollment process intended to provide current Marketplace consumers with a simple way to keep their 2014 QHP, although CMS encourages consumers to reevaluate their plan options and financial assistance eligibility for 2015. The rule also gives state-based Marketplaces flexible options to implement annual redetermination procedures.
The Obama Administration has issued two regulations addressing coverage of contraceptive services under QHPs in response to recent court rulings (in particular the Supreme Court ruling in Burwell v. Hobby Lobby Stores, Inc.) addressing certain religious objections to such coverage. First, an interim final rule provides an additional pathway for nonprofit organizations eligible for a religious accommodation to provide notice of their religious objection to covering contraceptive services. These eligible organizations are permitted to notify the Department of Health and Human Services (HHS) in writing of their religious objection to providing contraception coverage. HHS and the Department of Labor will in turn notify insurers and third party administrators so the organization’s enrollees will receive separate coverage for contraceptive services, with no additional cost to the enrollee or the employer. The interim final rule is effective August 27, 2014; comments will be accepted until October 27, 2014.
The Administration also published a related proposed rule that would extend to certain “closely-held” for-profit entities (such as Hobby Lobby) the same accommodation that is available to non-profit religious organizations with religious objections to coverage of contraceptive services. Under the proposed rule, these companies would not be required to contract, arrange, pay or refer for contraceptive coverage to which they object on religious grounds. Payments for contraceptive services provided to participants and beneficiaries in the eligible organization's plan would be provided separately by an issuer or arranged separately by a third party administrator, consistent with existing regulations for certain religious employers. Comments on the proposed rule are due by October 21, 2014.
On August 22, 2014, CMS will publish a final rule to update the Medicare hospice wage index for FY 2015 and make other payment and policy changes. CMS estimates that hospice payments will increase by 1.4% ($230 million) in FY 2015 compared to FY 2014 under the final rule. Specifically, CMS will update the hospice per diem rates by 2.1% (reflecting a 2.9% market basket increase that is reduced by 0.8 percentage points under ACA-mandated adjustments), but this update is partially offset by a 0.7 percentage point cut resulting from the use of updated wage data and CMS’s continued phase-out of its wage index budget neutrality adjustment factor. Hospices that fail to report quality data will have their market basket update reduced by 2 percentage points.
CMS is finalizing a number of policy proposals. For instance, the final rule requires hospices to file a beneficiary Notice of Election (NOE) within five calendar days after the effective date of hospice election (compared to three days in the proposed rule). If an NOE is not filed timely, the days from the effective date of election to the date of filing the NOE would be the financial responsibility of the hospice (unless there are exceptional circumstances). Likewise, CMS is requiring hospices to file a notice of termination/revocation within five (rather than the proposed three) calendar days of a beneficiary’s discharge or revocation, unless the hospice has already filed a final claim. The rule also, among other things: requires the hospice to identify the attending physician on the election form; revises the applicability of quality reporting penalties to new hospices; requires hospices to complete their hospice cap determinations within five months after the cap year but no sooner than 3 months after the cap period and remit any overpayments; and describes the development of the CAHPS® Hospice Survey.